the adviser logo

Suncorp Bank book returns to growth ahead of ANZ sale

by Annie Kane12 minute read
Suncorp Bank book returns to growth ahead of ANZ sale

The non-major’s home loan book grew 9 per cent in the financial year 2022, the first positive growth in net lending in several years.

Suncorp Bank released its financial results for the financial year ended 30 June 2022 (FY22) on Monday (8 August), revealing that it grew total lending by 7.8 per cent over the year, taking its balance sheet to a total of $62.1 billion over the year.

The growth was driven by net growth in its home lending book of $4.1 billion over the year.

Its mortgage book was $50.2 billion as at the end of June.


According to the bank, the growth particularly accelerated in the second half of the financial year, with 12.4 per cent annualised growth in the half (or $2.9 billion).

It suggested that this was driven by higher new business volumes, improved customer experiences and faster turnaround times. The bank had also introduced a solar home bonus offer for new and existing customers and launched a “green upgrades” loan for eligible eco-friendly home improvements over the year. 

Suncorp Group chief executive Steve Johnston noted that net home lending was up for the first time in several years, after FY21 had ended in a drop of 0.9 per cent (-$403 million) and FY20 fell by a sizeable -$1.3 billion (down 2.8 per cent on the year prior).

Speaking to investors, Mr Johnson said: “Two years ago the bank balance sheet was shrinking, turnaround times were among the worst in market and we’d lost the confidence of brokers.

“The contrast to today could not be more stark. In deposits, where our digital program is most relevant, at-call transaction accounts grew by more than 20 per cent.”

The bank suggested that “targeted investments in customer and broker experiences supported a significant increase in home loan customer NPS and broker NPS and a reduction in median application turnaround times.” 

According to the bank’s results, its average turnaround time in FY22 was 11 days, down from 16 days in FY21 (as per AFG stats).

It partially attributed this to “the continued delivery of productivity enhancements including process simplification and technology enhancements that increased assessor productivity”.

Broker lodgements also increased in the year – with the third-party channel originating 76 per cent of home loans (up from 68 per cent as at the end of FY21), and are responsible for 70 per cent of the banks’ total mortgage portfolio.

It suggested that it gained 4.8 bps of market share against competitors.

Lodgements increased from $17.8 billion in FY21 to $23.2 billion in FY22, with lodgement and settlement volumes remaining at near record levels across FY22, up 30.5 per cent and 65.3 per cent, respectively. 

However, record inflows were partially offset by elevated outflows (up 12.3 per cent on the prior comparative period), driven by higher property sales and refinances.

“Although the volume of external refinances increased, the bank outperformed system and achieved a positive net refinance rate across the year,” Suncorp Bank told investors.

As well as seeing home lending growth, the bank also saw continued momentum in business lending, with its commercial mortgage lending business helping bolster the book by 3.7 per cent to $11.8 billion.

The commercial portfolio increased to $4.9 billion “[o]n the back of a buoyant property market”.

Business transaction deposits were up by 27.2 per cent, with Suncorp noting that its digital service redraw facilities delivered alongside enhanced small and medium enterprise (SME) loan products had enabled more customers access to finance. 

Its personal lending portfolio continues to shrink (falling 45 per cent to $67 million) after Suncorp Bank decided to discontinue this offering in 2021.

Overall, profit for the bank (after tax) was down $51 million (or 12.2 per cent) to $368 million in FY22.

The results come as Suncorp prepares to sell its bank to ANZ Banking Group (subject to regulatory and government approvals).

According to the group, the strategic rationale for selling the bank includes wanting to:

  • Simplify its offering
  • Focus on strategic initiatives within Suncorp’s insurance business
  • Maximise value for shareholders
  • Position the bank for greater success over the medium to long term

It also reportedly aligns with ANZ’s vision for the bank’s future potential.

Mr Johnston told investors on Monday (8 August): “The strategic rationale for the sale is compelling. With the ability to focus exclusively on our insurance businesses, Suncorp will become a leading trans-Tasman insurer and have a louder voice in advocating for greater resilience and mitigation measures to better protect our customers and the community.

“Our insurance strategy is delivering and once the sale process is complete we will be able to do more, and faster.”

To support the sale process, Suncorp’s general counsel, Belinda Speirs, will be seconded into the role of group executive, completion & transition. 

The current group customer advocate, Michelle Bain, will step in as general counsel (subject to regulatory approvals) and form part of the group’s executive leadership team in this role.

[Related: ANZ moves to grab Suncorp’s home loan market share]



You need to be a member to post comments. Become a member for free today!
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more